France Telecom is to sell a 50 per cent stake in its Orange Cinéma Séries (OCS) channel bouquet to Canal Plus, until now its major competitor in French pay TV. Under the deal announced today, Canal Plus premium channel TPS Star and Orange Ciné Max will be merged into Ciné Star, an HBO-type premium channel bouquet showing first run movies and TV series. The four remaining OCS channels - Orange Ciné Happy, Orange Ciné Choc, Orange Ciné Novo and Orange Ciné Géants - will continue and will be distributed on the Canalsat and Orange platforms. Investments in original French content will remain in place and the content and technical staff will both remain in place.
Orange Cinéma Séries, launched in 2008, has 494,000 subscribers. The agreement with Canal Plus follows a strategic decision by France Telecom to reduce its investments in content by converting its fully-owned direct content investments into joint ventures.
Premium pay channel Orange Sport remains wholly owned by France Telecom. Its costly contract for rights to Ligue 1 runs to the end of the next (2011/12) season.
Through the deal with France Telecom, the incumbent telco with interests in consumer fixed and mobile telephony, IPTV and satellite TV, Canal Plus has once again seen off a challenge for its dominance of the French pay-TV market. In 2006, the Vivendi-owned group merged its Canalsat platform with rival TPS, which was backed by broadcasters TF1, M6 and others. Cable TV and the more recent potential threat of digital terrestrial TV and IPTV have also been contained.
While the expensive investments in French cinema will continue unaffected, it remains to be seen what impact the merger will have on third party suppliers - notably the Hollywood studios. France Telecom signed exclusive deals with Warner Bros and MGM which are believed to expire this year.
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